Hi, need to submit a 500 words essay on the topic This is not actually micro or macro the class is called Economics of developing countries.This is because, poor people around the world seldom access

Hi, need to submit a 500 words essay on the topic This is not actually micro or macro the class is called Economics of developing countries.

This is because, poor people around the world seldom access financial services through the formal sector, and hence, they are forced to venture into informal financial dealings which are in the form of micro-finance services (Gulli 50).

The history of Micro-finance dates back to hundreds of years. Credit corporations and lending unions have been in existence for many centuries. However, the pioneer of modern micro-finance is Dr. Mohammad Yunus, who in the 1970s started experimenting with the idea by using women in rural villages of Bangladesh. Yunus began lending affordable loans to the women, and they would later return at an interest. The women benefited from the loans because they were able to begin community projects that generated income for them. The profits enabled them to pay back the loans. Later in 1983, Yunus founded Grameen Bank, one of the world’s greatest micro-finance banks currently. Yunus won the Nobel Peace Prize in 2006 due to his efforts of improving the lives of poor women in Bangladesh. Innovation in micro-finance has continued over the years, and currently, it has been established that micro-finance solves economic problems of people in developing countries. Current estimates by the World Bank reveal that approximately 160 million people that live in developing countries benefit from micro-finance (Armendariz 67).

Comprehensive studies have demonstrated that micro-finance indeed works. Research has shown that micro-finance continues to assist poor individuals in developing countries to meet basic requirements, and protects them from any potential risks. These financial services have enabled low income earners to improve their quality of life and enhance their enterprise stability. Most Micro-finance Institutions (MFIs) target women, for example, Grameen Bank targets Bangladeshi poor women. This is of benefit as it contributes to women empowerment, and ensures that